Week 3: Comprehensive Case Study 1

David and Darlene Jasper have one child, Sam, who is 6 years old (birthdate July 1, 2011). The Jaspers reside at 4639 Honeysuckle Lane, Los Angeles, CA 90248. Davids Social Security number is 577-11-3311, Darlenes is 477-98-4731, and Sams is 589-22-1142. David and Darlenes earning and withholdings for 2017 are:

David: Earnings from Apple Company (office manager) $26,250

Federal income tax withheld 2,800

State income tax withheld 1,050

Darlene: Earnings from Rose Company (perfume tester) $25,175

Federal income tax withheld 2,650

State income tax withheld 916

Their other income includes interest from Pine Tree Savings and Loan of $1,835. Other information and expenditures for 2017 are as follows:

Interest: On home acquisition mortgage $11,175

Credit card 925

Taxes: Property taxes on personal residence 1,300

State income taxes paid in 2016 (for 2015) 315

Contribution (with written acknowledgement) to church 1,020

Medical insurance 675

Medical and dental expenses 5,785

Income tax return preparation fee paid in 2017 200

Payment of union dues 225 Actual general state sales tax for 2017 1,016

David and Darlene received the following letter from Sams daycare provider:

KIDDIECARE INC.

10250 Santa Monica Blvd.

Los Angeles, CA 90067

EIN: 13-3345678

January 14, 2018

David and Darlene Jasper

4639 Honeysuckle Lane

Los Angeles, CA 90248

Dear David and Darlene,

Thank you for your patronage of our day care center with your child, Sam Jasper in 2016. This statement serves as a record of the cost of daycare services we provided during calendar year 2016.

Child	Amount	Dates of Service
Sam Jasper	$3,500	1/1/2017 8/25/2017

Sincerely,

/s/ Marcia Clarke

Marcia Clarke

Director, KiddieCare Inc.

In 2017 David lost his job. David paid for one month of insurance out-of-pocket and then the family went without insurance for September through December 2017. They are not eligible for any exemptions from health care coverage.

Required: Complete the Jaspers federal tax return for 2017. Use Form 1040, Schedule A, Schedule B, and Form 2441, which can be found on the IRS website. Make realistic assumptions about any missing date. You will also need to use the Shared Responsibility Payment worksheet and the Flat Dollar Amount worksheet found in Chapter 6 of your text.

Submit the appropriate tax forms for your managers (instructors) review and feedback.